Xu Ping injecting some pizzazz into FAW
By Wang Zhen
2015-05-08
The new boss at China's FAW Group Corporation, Xu Ping, could be facing a real challenge in reviving a one-time automotive pioneer but one that, in recent years, has found itself struggling against rivals such as Changan and BAIC Motor.
But, if he does succeed, it will be one of the highest profile turnarounds in China's auto manufacturing history, not least of all because he jumped ship from Dongfeng Motors, a leading commercial vehicle manufacturer, where he has been involved for three decades.
In any case, he has pledged to "strengthen self-development" at FAW.
The 58-year-old Xu joined Dongfeng Motors in 1982 and spearheaded many of its strategic moves, including the establishment of a joint venture with AB Volvo, in 2013, specializing in medium and heavy trucks, vans, engines and gearboxes.
More recently, the company, under his leadership witnessed the purchase of a 14-percent stake in France's PSA Peugeot Citroen in 2014, as reported by Xinhua. And when he was appointed manager of Dongfeng in 2005, the Organization Department of the Communist Party of China (CPC) commented on Xu's "unparalleled track record in business operations and management, and superior skills in strategy, coordination and implementation".
But this Chinese automotive veteran, who actually has a background in electrical engineering, will find himself facing some challenges that FAW has had to deal with for several years, not least of which was when the giant State-owned vehicle manufacturer was accused of rampant nepotism.
In commenting on the move, renowned auto analyst Zhang Zhiyong says, "He's a brand new face at FAW and that can make reforms much easier. The first thing he’s going to do is automatically cut the nepotism. I think it's going to be a lot easier to reorganize the company under a more effective mechanism and no corruption."
Its previous president, Xu Jianyi, stepped down in March, and was under investigation by Commission for Discipline Inspection of the Central Committee of the CPC for "serious violation of laws and regulations".
So, FAW has had to struggle in the throes of a power vacuum and increased competition from rivals, including Changan and Dongfeng Motors, and foreign joint-ventures such as Beijing Hyundai. And, while it's still one of the largest auto manufactures, its four brands -- Xiali, Benteng,Oley, and Hongqi --account for only a small share of the market putting it in a disadvantageous position.
Zhang, the analyst continues, strengthening self-development and injecting some new developmental thought into its business model is the priority the new president will [have to] take.
He describes FAW's development position as "inadequate" and adds that the rapid development of joint-ventures, such as FAW Toyota Motor, disguises the fact that its own brands are in decline.
In addition, FAW has no automotive R&D system of its own and is largely dependent on foreign partners' resources, and, Zhang notes, "It needs a clear strategy, including R&D and branding. That's the experience that Xu can bring to FAW for stronger development."
Mr Xu is known as a talented leader with a low-profile and open-minded work style, according to those who worked under him at Dongfeng, where, as president, he immediately emphasized the idea of both self-development and cooperation.
Xu and his management team adopted a clear brand strategy that helped integrate all sorts of resources in R&D, accessories, other products and marketing, reinforcing Dongfeng's market position and, in 2014, it came in at second place in domestic automobile car sales, with 3.8 million.
Now, while FAW stands at a cross-roads and wonders where to go, Xu's principle of self-development and cooperation that once helped revive hopes about Dongfeng’s future, just might put some power behind the State-owned giant as China's car business adjusts to the "new normal".
In any case, as the staff members of Dongfeng Motor said at a valedictory party for Xu, on May 6, "Manager Xu, you’re always a Dongfeng'er no matter what, and the company owes you a lot."
